"Research by the Peterson Institute for International Economics in 1997 showed that, in instances where the United States imposed economic sanctions in partnership with other nations, between 1945 and 1970 they were successful in 16 cases and failed in 14 – a success rate of 53 per cent. Between 1970 and 1990, when sanctions were applied more prolifically, they succeeded in 10 instances and failed in 38, reducing the success rate to 21 per cent. ...Unilateral US sanctions had a high success rate of 69 per cent between 1945 and 1970, tumbling to 13 per cent in the period 1970-90."

Meanwhile, "in economic terms they carry a cost. …the reality is that Russia is the European Union’s third largest commercial partner and the EU, reciprocally, is Russia’s chief trade partner. Who thought it was a good idea to subvert this arrangement?"

"Economic sanctions have the same credibility as poisoning the public water supply in the hope of killing some enemies. Sanctions are not a weapon that can responsibly be used in a globalised economy."

Yep. On the money. Though I am not so sure that "killing some enemies" is even an attainable goal here: so far, sanctions have been hitting predominantly smaller enterprises (via cut off of credit supply) and ordinary people (via supporting currency devaluations). As per oligarchs and Government-connected elites, for every instance where their property abroad has suffered, there are tens of thousands of instances where devalued ruble has made their forex holdings and forex-denominated portfolios of investments increase in purchasing power. So be prepared to see more concentration of economic power in Russia in their hands over the next 12 months.

Disclaimer

This blog represents my personal views and is not reflective of the views or opinions held by any company, contractor, client or employer I work for currently or have worked for in the past. These views are not an endorsement to take any action in the markets or of any political position, figures or parties.

“It is not true that people stop pursuing dreams because they grow old, they grow old because they stop pursuing dreams.” Gabriel Garcí­a Márquez

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"Getting worse more slowly is not the same as getting better", Prof. Brad DeLong